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by Mike Caswell

Bronte Capital Management Pty. Ltd., the Australian hedge fund manager facing a defamation lawsuit from Silvercorp Metals Inc., denies that it had any role in a short-and-distort scheme that targeted the company in 2011. Bronte says a report on its website that suggested shorting the stock merely conveyed an opinion. The fund manager had no intention to manipulate Silvercorp with the posting.

The statements come in response to a lawsuit that Bronte faces in the Supreme Court of British Columbia from Silvercorp over an Oct. 25, 2011, blog posting. The post, written by Bronte employee John Hempton, left readers with the impression that the company was a fraud on investors, the suit claimed. It questioned the company's reported costs for its Ying mine in China, saying they were "ludicrously cheap."

Bronte claims that there was nothing defamatory about the report, and certainly nothing that would portray Silvercorp as a fraud on investors. Even if there were a defamatory meaning, the report constitutes fair comment on a matter of public interest, Bronte says.

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